Targets and target achievements

Vattenfall’s assignment from its owner is to generate a market rate of return by operating an energy business in such a way that the company is among the leaders in developing sustainable energy production.

Stable financial performance, that provides scope for long-term investments enables environmentally sustainable energy production as well as new product solutions for sustainable consumption of electricity, gas and heat.

Vattenfall’s owner has set four financial targets for the Group, and the Board had earlier set three sustainability targets.

However, in December 2015 Vattenfall’s Board of Directors adopted six new strategic long-term targets for Vattenfall to better reflect the strategy and the Group's four strategic objectives.

Effective January 2016, the three former sustainability targets will be replaced by the six new strategic long-term targets. The four financial targets, set by the owner, will remain as long-term targets for Vattenfall. The strategic targets have been set for 2020 and will be followed up on a quarterly and annual basis.

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Strategic objectives Strategic targets for 2020

Leading towards sustainable consumption

1. Customer loyalty, NPS (Net Promoter Score): +2 NPS1 relative

Leading towards sustainable production

2. Commissioned renewables capacity: ≥2,300 MW
3. Absolute CO2 emissions pro rata: ≤21 Mtonnes2

High performing operations

4. ROCE: ≥9%

Empowered and engaged organisation

5. LTIF3 (Lost Time Injury Frequency): ≤1.25
6. Employee Engagement Index: ≥70%4

1) NPS is a tool for understanding customers’ perception of Vattenfall’s products and services and for measuring customer loyalty. The target is a positive absolute NPS value +2 compared to peers. 

2) Require significant structural changes.

3) Lost Time Injury Frequency (LTIF) is expressed in terms of the number of lost time work injuries (per 1 million hours worked), i.e., work-related accidents resulting in absence longer than one day, and accidents resulting in fatality. Pertains to Vattenfall's employees. 

4) The basis for the target consists of the results from the employee survey My Opinion.

Financial targets

The financial targets relate to profitability, capital structure and the dividend policy, and were set by the owner in November 2012. The targets are intended to ensure:

  • Value creation and a market rate of return
  • An efficient capital structure
  • Financial risk kept at a reasonable level

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Profitability Outcome 2015 Comments

Return on capital employed: 9%

-8.2% The outcome for 2015 was -8.2% (-0.7%), mainly as a result of impairment losses on asset values totalling SEK 36.8 billion. Excluding the impairment losses and items affecting comparability, the return on capital employed was 7.4% (8.2%)
Capital structure Outcome 2015 Comments

FFO/adjusted net debt: 22%–30%

21.1% The outcome for 2015 improved compared to 2014 (20.3%), but was still below the target interval. Funds from operations decreased mainly as a result of the lower profit, while adjusted net debt decreased, mainly as a result of lower net debt.

Debt/equity ratio: 50%–90%

55.4 The outcome for 2015 was 55.4% (61.9%). The  improvement is mainly attributable to a lower level of net debt. The debt/equity ratio is within the target interval.
Dividend policy Outcome 2015 Comments

The dividend should amount to 40%–60% of the year's profit after tax

0% Due to the negative result after tax, the Board proposes – in accordance with Vattenfall's dividend policy – that no dividend be paid for 2015.

Sustainability targets for 2015

Vattenfall's previous sustainability targets are in the same areas as the EU's 2020 targets and were decided by Vattenfall's board of directors in October 2012.

The targets cover the following:

  • Lower CO2 exposure
  • Growth in renewable electricity generation
  • Energy efficiency

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Lower CO2 exposure Outcome 2015 Comments

Vattenfall will reduce its CO2 exposure to 65 million tonnes of absolute emissions by 2020

CO2 emissions amounted to 83.8 million tonnes in 2015 Vattenfall's CO2 exposure grew slightly in 2015 as a result of the commissioning of the Moorburg power plant in Germany.
Growth in renewable electricity generation Outcome 2015 Comments

Vattenfall's growth rate of installed renewable capacity will be higher than the average growth rate for ten defined countries in northern and central Europe1

13.4% 445 MW of new renewable capacity was installed in 2015. Newly installed capacity consisted mainly of the DanTysk offshore wind farm in Germany, the Clashindarroch onshore wind farm in the UK, the Klim onshore wind farm in Denmark, the Juktan onshore wind farm in Sweden and the extension of the Kentish Flats offshore wind farm in the UK.
Energy efficiency Outcome 2015 Comments

Vattenfall will save 440 GWh in 2015

Activities carried out in 2015 led to an annual decrease in energy need by approximately 1,066 GWh The increase in annual energy savings was higher than the target and consisted mainly of measures such as turbine and generator replacements, and expansion of district heating networks in Berlin and Germany.

1) The ten defined countries are Denmark, Finland, Norway, Sweden, Belgium, France, the Netherlands, Poland, the UK and Germany.

Last updated: 2014-10-15 09:29